Assertion (A): Capital Expenditure is shown in the Balance Sheet. Reason (R): Its benefit is exhausted within the current accounting period. MCQ with Answer and Explanation

Question

Assertion (A): Capital Expenditure is shown in the Balance Sheet. Reason (R): Its benefit is exhausted within the current accounting period.

A. Both A and R are true and R is the correct explanation of A

B. A is false but R is true

C. Both A and R are true but R is not the correct explanation of A

D. A is true but R is false

Answer: Option D

Solution (By JKSSB Mock Tests)

Capital expenditure yields benefits over multiple future periods (hence an asset), making Reason R false. R describes revenue expenditure.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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Which of the following statements about GST is/are correct? 1. It is a destination-based consumption tax. 2. It subsumes all central and state indirect taxes. 3. Petroleum products are presently outside GST. 4. The GST Council is a constitutional body.

A. 1, 3 and 4

B. All of the above

C. 1, 2 and 3

D. 2, 3 and 4

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Correct Answer: Option A

Explanation:
Statement 2 is incorrect because some taxes like basic customs duty, stamp duty are not subsumed. 1, 3, 4 are correct.

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Question #2

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Which of the following is not an objective of budgetary control?

A. Co-ordination

B. Control

C. Planning

D. Profit maximization in the short run

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Correct Answer: Option D

Explanation:
Budgetary control aims at planning, coordination, control, and efficiency, not just short-term profit maximization.

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Question #3

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S1: Ind AS 115 deals with Revenue from Contracts with Customers. S2: Ind AS 116 deals with Leases. Which statement(s) is/are correct?

A. Neither S1 nor S2

B. S2 only

C. Both S1 and S2

D. S1 only

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Correct Answer: Option C

Explanation:
Ind AS 115 prescribes the principles for recognizing revenue from contracts with customers. Ind AS 116 specifies the accounting for leases. Both statements correctly identify the respective standards.

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